* Oil bounces after touching a 2-month low below $69
* Dollar declines vs euro after Dubai bailout news
* Crude pressured on oil demand worries
(Updates prices, adds details)
By Osamu Tsukimori
TOKYO, Dec 14 (Reuters) - Oil headed lower for a ninth
straight session on Monday, but pared losses after news of a
Dubai bailout, which boosted the euro against the dollar as
risk appetite improved.
Asian stocks also rebounded after Dubai said it had
received $10 billion from Abu Dhabi to help it repay $4.1
billion in an Islamic bond, easing fears of a potential debt
default that had rattled global markets. []
A weak dollar makes dollar-denominated commodities like
crude less expensive for holders of other currencies and tends
to support prices.
Crude for January delivery <CLc1> fell 22 cents to $69.65 a
barrel by 0714 GMT, after falling as low as $68.59 earlier, the
lowest since Oct. 5.
If the contract settles down on Monday, that would match a
nine-day losing streak in July 2001.
Crude, up some 56 percent so far this year, but still less
than half its July 2008 peak of more than $147 a barrel, has
fallen some 11 percent in the past nine sessions.
"Recently forex rates have had a large impact on the
market," said Tomokazu Amano, an analyst at Mitsubishi Corp
Futures & Securities in Tokyo. "As the Christmas and year-end
seasons approach, position adjustments to cut long positions
are also increasingly being seen."
London Brent crude <LCOc1> was up 8 cents at $71.96.
Traders said one item to watch this week is the U.S.
Federal Reserve's monetary policy decision, to be announced on
Wednesday.
The Federal Open Market Committee will likely try to find a
way to capture a somewhat brighter economic outlook in its
policy announcement, while maintaining its pledge to keep
borrowing costs at near record lows for an "extended period."
[]
But concerns about a sluggish recovery in global fuel
demand, along with high fuel stockpiles in the United States,
have been pressuring crude prices.
In particular, stocks at Cushing, the delivery point for
NYMEX WTI crude futures, have swelled by 7.8 million barrels in
the last six weeks to 33.4 million barrels <USOICC=ECI>,
putting pressure on the front month and widening its discount
to the second month to over $2, from around 40 cents in October
and 60 cents in November. <CL-1=R>
However, oil storage capacity at Cushing has expanded by
5.2 million barrels this year, a Reuters survey shows, cutting
the risk that a shortage of tanks could cause oil prices to
plunge. []
Japanese stocks ended down slightly on Monday, despite a
Bank of Japan survey showing Japanese business confidence edged
up more than expected in the three months to December.
[]
The market has largely factored in an outlook that the
Organization of the Petroleum Exporting Countries would hold
its output targets steady at its meeting on Dec. 22.
The recent drop in the price of oil will not affect OPEC's
inclination to keep its production target unchanged, Kuwait's
oil minister said on Sunday. []
Separately, Iraq, emerging from the shadows of war, expects
to boost its oil output to rival the level of top producer
Saudi Arabia after awarding some of its most attractive
oilfields to global energy companies. []
At the end of a two-day bidding round for 10 oil contracts
-- the second auction since the 2003 U.S. invasion -- Baghdad
had received pledges from oil firms to boost output by 4.765
million barrels per day, almost double Iraq's current output.
(Editing by Michael Urquhart)
